Alan Greenspan's Answer To Income Inequality

Off Topic Politics and World Issues
1

â??I consider income inequality the most dangerous part of whatâ??s going on in the United States,â?? Greenspan said. â??You can see the deteriorating impact of that on our current political system, and you cannot talk about politics without talking about its impact on the economy.â??

â??We cannot manage to staff our very complex, highly sophisticated capital structure with whatâ??s coming out of our high schools,â?? Greenspan said. â??If weâ??re not going to educate our kids, bring in other people who want to become Americans. Let them in here and let them use their skills.â??He said that current restrictions on skilled immigrants are an effective wage subsidy for high-earners, contributing to increased income inequality.Increasing competition for higher-wage jobs would eliminate some of the injustice in wages in this country, he said, because â??income inequality is a relative concept.â?? He added, â??You donâ??t have to bring up the bottom if you bring the top down."

2

The argument seems to be based off of supply-demand of higher-incomes skills.

And, uh, where does this wealth go? Some to cheaper prices, I suppose. But how much more goes upstream of these displaced high-skill workers? To CEO’s, owners, and such? So now an even smaller elite pulls even further ahead. In the mean time they live in their exclusive gated communities, or completely outside of the nation, having their native citizens replaced, buying them off temporarily with welfare, entitlements, and mandates.

Oh, and…

So close off unskilled/low-skilled immigration to bring up the bottom? Doesn’t this supply-demand argument seem to suggest there is a glut of low-skilled labor?

3

He’s saying CEO’s and people at the top need to take the hit. Something many of us have been preaching for years.

4

[quote]Sloth wrote:
The argument seems to be based off of supply-demand of higher-incomes skills.

And, uh, where does this wealth go? Some to cheaper prices, I suppose. But how much more goes upstream of these displaced high-skill workers? To CEO’s, owners, and such? So now an even smaller elite pulls even further ahead. In the mean time they live in their exclusive gated communities, or completely outside of the nation, having their native citizens replaced, buying them off temporarily with welfare, entitlements, and mandates.

Oh, and…

So close off unskilled/low-skilled immigration to bring up the bottom? Doesn’t this supply-demand argument seem to suggest there is a glut of low-skilled labor?
[/quote]

Yes…and yes.

5

[quote]Severiano wrote:
He’s saying CEO’s and people at the top need to take the hit. Something many of us have been preaching for years.[/quote]

I think you got it wrong. Not the business, financial, and political leaders; he means the members of the ‘professional’ ranks. Doctors, lawyers, engineers, programmers, accountants, etc.

6

[quote]BlueCollarTr8n wrote:

[quote]Severiano wrote:
He’s saying CEO’s and people at the top need to take the hit. Something many of us have been preaching for years.[/quote]

I think you got it wrong. Not the business, financial, and political leaders; he means the members of the ‘professional’ ranks. Doctors, lawyers, engineers, programmers, accountants, etc. [/quote]

That’s how I read it.

So he’s saying our system keeps people from obtaining appropriate competition for professional positions effectively keeping professional wages artificially high at the expense of the lower paid workers.

He may have some point but I don’t think that’s the problem. We have a desperate need for well qualified people at professional levels. So you’ll see a lot of professionals are paid at the lower end of things, but a few are paid at the higher end.

Take lawyers for example. There is a significant oversupply of lawyers, so most lawyers are happy to making $50-80k/year. But there’s a few, top tier lawyers who make bank, but it’s not because of a lack of the # of competitors, just the # of competent/experienced competitors.

7

[quote]ZJStrope wrote:

[quote]BlueCollarTr8n wrote:

[quote]Severiano wrote:
He’s saying CEO’s and people at the top need to take the hit. Something many of us have been preaching for years.[/quote]

I think you got it wrong. Not the business, financial, and political leaders; he means the members of the ‘professional’ ranks. Doctors, lawyers, engineers, programmers, accountants, etc. [/quote]

That’s how I read it.

So he’s saying our system keeps people from obtaining appropriate competition for professional positions effectively keeping professional wages artificially high at the expense of the lower paid workers.

He may have some point but I don’t think that’s the problem. We have a desperate need for well qualified people at professional levels. So you’ll see a lot of professionals are paid at the lower end of things, but a few are paid at the higher end.

Take lawyers for example. There is a significant oversupply of lawyers, so most lawyers are happy to making $50-80k/year. But there’s a few, top tier lawyers who make bank, but it’s not because of a lack of the # of competitors, just the # of competent/experienced competitors.[/quote]

I don’t think he means ‘…at the expense of the lower paid workers’. I think he means at the expense of profits. Otherwise I agree with you.

8

[quote]BlueCollarTr8n wrote:

[quote]Severiano wrote:
He’s saying CEO’s and people at the top need to take the hit. Something many of us have been preaching for years.[/quote]

I think you got it wrong. Not the business, financial, and political leaders; he means the members of the ‘professional’ ranks. Doctors, lawyers, engineers, programmers, accountants, etc. [/quote]

Yeah, the article can’t be talking about the leadership level of finance and industry. For they are the ones looking to hire the proposed high-skill supply, looking to benefit off of paying them less. Part of me says go for it.

9

[quote]BlueCollarTr8n wrote:

[quote]ZJStrope wrote:

[quote]BlueCollarTr8n wrote:

[quote]Severiano wrote:
He’s saying CEO’s and people at the top need to take the hit. Something many of us have been preaching for years.[/quote]

I think you got it wrong. Not the business, financial, and political leaders; he means the members of the ‘professional’ ranks. Doctors, lawyers, engineers, programmers, accountants, etc. [/quote]

That’s how I read it.

So he’s saying our system keeps people from obtaining appropriate competition for professional positions effectively keeping professional wages artificially high at the expense of the lower paid workers.

He may have some point but I don’t think that’s the problem. We have a desperate need for well qualified people at professional levels. So you’ll see a lot of professionals are paid at the lower end of things, but a few are paid at the higher end.

Take lawyers for example. There is a significant oversupply of lawyers, so most lawyers are happy to making $50-80k/year. But there’s a few, top tier lawyers who make bank, but it’s not because of a lack of the # of competitors, just the # of competent/experienced competitors.[/quote]

I don’t think he means ‘…at the expense of the lower paid workers’. I think he means at the expense of profits. Otherwise I agree with you. [/quote]

Yeah I didn’t think he meant a the expense of lower paid workers. What I mean is he thinks by introducing more professionals, you have a higher supply of professionals and by default, wages will be lowered for professionals and at the same time, the supply of lower skilled workers will decrease. So you have a flatter distribution curve.

The ONLY way to get the income gap down at the Owner/CEO/1 per center level is to have more competitive businesses.

Now Greenspan’s plan may allow for more opportunities for more business competition, but when all big companies have to do is either buy the little guy up out, squash them through regulation changes like increasing minimum wage, and otherwise making lift difficult for them, it’s hard to grow to a point where you can compete.

There are just to many barriers to entry for that to be a reality.

10

I haven’t read the article on purpose as I want to read the responses first…

[quote]ZJStrope wrote:

So he’s saying our system keeps people from obtaining appropriate competition for professional positions effectively keeping professional wages artificially high at the expense of the lower paid workers.

[/quote]

So, his assertion is then that our standards of which one has to meet to be qualified for these positions are too high?

Because no one is stopping people from trying to accomplish becoming one of these people other than the results of those that are there. If someone can’t keep up enough to be a successful CPA or engineer, that is on them to then find something they can excel at. Not everyone is cut out to be everything.

Doesn’t make them a bad person, I would be a shit engineer. I’m not too bad at accounting.

11

[quote]countingbeans wrote:
I haven’t read the article on purpose as I want to read the responses first…

[quote]ZJStrope wrote:

So he’s saying our system keeps people from obtaining appropriate competition for professional positions effectively keeping professional wages artificially high at the expense of the lower paid workers.

[/quote]

So, his assertion is then that our standards of which one has to meet to be qualified for these positions are too high?

Because no one is stopping people from trying to accomplish becoming one of these people other than the results of those that are there. If someone can’t keep up enough to be a successful CPA or engineer, that is on them to then find something they can excel at. Not everyone is cut out to be everything.

Doesn’t make them a bad person, I would be a shit engineer. I’m not too bad at accounting. [/quote]

No, he’s saying that we are not churning out enough people with the knowledge and skills to become a competent professional. So by opening up immigration, you invite more smart, well qualified people to increase that pool.

12

And the decline in public education, that Greenspan mentions, has happened as the federal government has increased its influence over it. From No Child Left Behind to now Obama’s hard on for the Common Core and the push to privatize public education by the Gates Foundation, and others, we are seeing local control over education (parents, teachers, local school boards) being given away to those who have no real interest in or connection to the children who are affected. They don’t care if they actually learn anything as the bottom line is what matters.

13

[quote]ZJStrope wrote:

[quote]countingbeans wrote:
I haven’t read the article on purpose as I want to read the responses first…

[quote]ZJStrope wrote:

So he’s saying our system keeps people from obtaining appropriate competition for professional positions effectively keeping professional wages artificially high at the expense of the lower paid workers.

[/quote]

So, his assertion is then that our standards of which one has to meet to be qualified for these positions are too high?

Because no one is stopping people from trying to accomplish becoming one of these people other than the results of those that are there. If someone can’t keep up enough to be a successful CPA or engineer, that is on them to then find something they can excel at. Not everyone is cut out to be everything.

Doesn’t make them a bad person, I would be a shit engineer. I’m not too bad at accounting. [/quote]

No, he’s saying that we are not churning out enough people with the knowledge and skills to become a competent professional. So by opening up immigration, you invite more smart, well qualified people to increase that pool.[/quote]

…well that and you pad the democratic voter base so that there will never be another republican president.

the intelligent immigrants are probably following the law and trusting our disloyal democrat leaders to allow them in before the illegal grass cutters, hotel maids and roofers.

the democrats know real low income Americans would never do that work, unless we cut their ebt/food stamp balances in half.

anyone that disagrees - then find me ten low income families in your city that aren’t overweight. please allow me to write this as i worked for the state and saw it on the job everyday. harry reid should mention the liars are the party with starving children in America. the only reason they may be starving are because of immoral parents. in America you can not force parents to do the moral thing

the American poor seem to have money for everything other than food for their children.if i am incorrect the government food stamps and school free lunch programs must be colossal failures.

14

[quote]conservativedog wrote:

[quote]ZJStrope wrote:
No, he’s saying that we are not churning out enough people with the knowledge and skills to become a competent professional. So by opening up immigration, you invite more smart, well qualified people to increase that pool.[/quote]

…well that and you pad the democratic voter base so that there will never be another republican president.[/quote]

I don’t think Greenspan is known for his ‘lefty’ approach to economics.

15

[quote]ZJStrope wrote:

[quote]BlueCollarTr8n wrote:

[quote]Severiano wrote:
He’s saying CEO’s and people at the top need to take the hit. Something many of us have been preaching for years.[/quote]

I think you got it wrong. Not the business, financial, and political leaders; he means the members of the ‘professional’ ranks. Doctors, lawyers, engineers, programmers, accountants, etc. [/quote]

That’s how I read it.

So he’s saying our system keeps people from obtaining appropriate competition for professional positions effectively keeping professional wages artificially high at the expense of the lower paid workers.

He may have some point but I don’t think that’s the problem. We have a desperate need for well qualified people at professional levels. So you’ll see a lot of professionals are paid at the lower end of things, but a few are paid at the higher end.

Take lawyers for example. There is a significant oversupply of lawyers, so most lawyers are happy to making $50-80k/year. But there’s a few, top tier lawyers who make bank, but it’s not because of a lack of the # of competitors, just the # of competent/experienced competitors.[/quote]

How about that elephant? Ain’t he a beauty? I’m talking about the one right here in the room with us. Immigration should be eased up because the steady state curve for economic models shows that pretty much policies don’t mean squat and that economics overcomes all – if we have a lot of immigrants it is because the economy needs them, not because they are freeloading.

However, that is not the issue we need to think about. There is a vast over-supply in all areas, including STEM (Science & Tech folks). The elephant in the room is college: Debt funded and often times cranking out poorly trained people. Foreigners are more often preferred in jobs because they actually got educated in their field. One recent scandal was a study that showed conclusively that Americans are discriminated against in the job market. They are seen as less capable and less competent than foreigners. This means they often have to accept underemployment and poor wages to pay back their loans. Crushing student debt, poor qualifications and limited immigration are all part of the issue. Most universities rake in the money and pay no taxes, but are very poorly run and waste a lot fo what they get. Until we all admit that colleges are just debt-driven accreditation mills with virtually no relationship to producing competent workers, we will have a downward spiral of wages and this bifurcation as businesses desperately fight for people with great skills and treat the rest like burger flippers.

The amazing thing about the Occupy! movement? Almost nobody stood up and said their school lied to them and they want their tuition back. Nope. Wall Street is to blame for not living up to university promises. If this isn’t mis-education feeding itself (three cheers for those Marxist English profs who gave their students such a serviceable worldview!), I don’t know what is.

And As always, I am probably just full of shit…

– jj

16

jj, I for one, wish you posted more.

Agree or not, you have a great perspective.

17

[quote]jj-dude wrote:
How about that elephant? Ain’t he a beauty? I’m talking about the one right here in the room with us. Immigration should be eased up because the steady state curve for economic models shows that pretty much policies don’t mean squat and that economics overcomes all – if we have a lot of immigrants it is because the economy needs them, not because they are freeloading.

However, that is not the issue we need to think about. There is a vast over-supply in all areas, including STEM (Science & Tech folks). The elephant in the room is college: Debt funded and often times cranking out poorly trained people. Foreigners are more often preferred in jobs because they actually got educated in their field. One recent scandal was a study that showed conclusively that Americans are discriminated against in the job market. They are seen as less capable and less competent than foreigners. This means they often have to accept underemployment and poor wages to pay back their loans. Crushing student debt, poor qualifications and limited immigration are all part of the issue. Most universities rake in the money and pay no taxes, but are very poorly run and waste a lot fo what they get. Until we all admit that colleges are just debt-driven accreditation mills with virtually no relationship to producing competent workers, we will have a downward spiral of wages and this bifurcation as businesses desperately fight for people with great skills and treat the rest like burger flippers.

The amazing thing about the Occupy! movement? Almost nobody stood up and said their school lied to them and they want their tuition back. Nope. Wall Street is to blame for not living up to university promises. If this isn’t mis-education feeding itself (three cheers for those Marxist English profs who gave their students such a serviceable worldview!), I don’t know what is.

And As always, I am probably just full of shit…

– jj
[/quote]
There is some truth there but I don’t see the correlation between a glut of STEM graduates, and there is a glut of PhDs in those fields, and Marxist English professors. If anything it is the influences outside of the universities that push students to major in those areas that we’ve been told there is a shortage. How many times have we heard Obama, among others, say we need more engineers, scientists, etc.? Recently he made a comment about majoring in art history vs a more prudent choice like training to work in manufacturing. The problem is that he could have inserted any major in there and made the same point.

18

And what type of school system educates these foreigners? The crushing debt model, or the public pays for it model?

19

[quote]Sloth wrote:
And what type of school system educates these foreigners? The crushing debt model, or the public pays for it model?[/quote]
Ding! Ding! We have a winner!

20

[quote]zecarlo wrote:

[quote]Sloth wrote:
And what type of school system educates these foreigners? The crushing debt model, or the public pays for it model?[/quote]
Ding! Ding! We have a winner![/quote]

lol

I mean, if the loans are federally backed, there is little effective difference.